Planning Backwards: Ben Rifkin on how you have to know what your company is growing up to be before you start looking for investors.

Kickstarter campaigns, wefunder, and equity crowdfunding—we’ve been talking a lot about new techniques for raising capital over the past few months! This week, I’m switching gears and talking with a colleague who works in a more traditional funding field: venture capitalism.

Ben Rifkin, president of Royal Street Investment and Innovation Center and my mentor for the upcoming OWIC Pitchfest, is visiting this week’s Intrepid Entrepreneur Podcast to share his experience working in venture capital, evaluating new companies and collaborating with them to meet goals.

Before you even start looking for capital and investors, Ben says you need to know what your end goal is and then think backwards. What kind of company is your startup going to grow up to be? He’s sharing his thoughts on what kind of investments different types of companies might look for. It’s about knowing whose attention you want to catch before you need it.

We’re also discussing how startups can benefit from both crowdfunding and venture investments. Running a strong crowdfunding campaign and getting your product out on time, as promised, can speak volumes to future investors. It says a lot about one of the most important assets a company can have—you, the founders! And these aren’t the only ways you can use successful non-traditional sources of funding to prove your product to traditional investors!

Ben’s also letting us in on what he sees as the difference between tech startups and the outdoor markets, and how this changes the search for investors.

Although crowd funding has given us entrepreneurs some amazing opportunities, this conversation with Ben sheds some really insightful light on what investors look for, how to think about and present the future of your business, and the wide range of options for those of us who might need capital to get to where we want to be.

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Cliff Notes

Venture capital is the most expensive money a company can take, because you have to give up pieces of your company to get it (equity). With venture, every time you make money you have to give away some of your company.

For entrepreneurs, the benefit of non-traditional funding (crowd funding, etc.) is that you can access capital without losing control or having to give up a steak in your company.

Venture capital is not for every company, but it opens pathways to very quick growth and can be lucrative, for the entrepreneur as well as for the acquiring company, in the right scenario.

Companies with a good Kickstarter or crowdfunding campaign, that raise the money and then deliver the product on time, look really good to venture capitalists, and are more likely to get a strong consideration, Kickstarter can work as a proof of concept.

Non-traditional funding can also allow companies to get a lot farther along before they start needing or seeking more traditional investments from firms.

Two pathways to growth:

Pour in a lot of money and focus on getting distribution up as fast as possible without worrying about bottom line. This is kind of an older model, and you often end up needing capital to fund operating costs, etc.

Establish a track record and grow by connecting with consumers more directly through social media, platforms, etc. Take advantage of these developments for feedback and get to know your consumers.

Venture capital firm puts a lot of value on founders, since they are usually the CEO, the person who has gotten the company up and running to the point that it’s at, and they are the one who will see it through any changes in the future.

A founder who was taken the time to get to know their customers, respond to feedback and pays attention to the metrics is a very important factor to venture capitalists.

Any data an early stage company can gather to test their hypothesis and proof of product helps venture capital firms to know how far along the company is. Look for way to show them that it has been “de-risked”.

Listening is a very important quality for an entrepreneur to have. Not just listening to an investor or mentor’s advice and following it to the letter, but being open to suggestions and taking them into serious consideration.

When thinking about sources of capital, it is important to think about the end goal of your business first. What is it trying to grow up to be? And from there, think backwards about what kinds of funding will get it there.

Outdoor markets are more competitive than technology markets. More competitive for consumers, and definitely more competitive if your goal is to be acquired by a venture capital firm.

Some outdoor startups are looking to be more “lifestyle businesses”, meaning profitable, returning money to shareholders and very large. In this case, you probably don’t want to get acquired by a venture capital firm.

If you are looking to get acquired, you should know the names of the firms you’re interested in and who’s radar it’s important to be on before you even start going out there to look for money.

Resources

Kristin Carpenter-Ogden: It’s awesome to have you here. And so just so everybody knows, I want to just let everybody know that you’re located up in one of my favorite areas. Park City, correct? In Utah.

Ben Rifkin: Correct. That is correct.

Kristin Carpenter-Ogden: That’s really turning out to be a nice, little hot bit of entrepreneurial innovation. I guess maybe it always has been, but I have been seeing it more visibly with Park City brewing, and I guess the most recent addition would be the Park City bike rental company that Andre is doing. And it just seems like there’s a lot of fun–obviously, back country, probably kick the whole thing off. Gosh, I guess it’s now almost 20 years ago, which is crazy. So tell us a little bit about your firm and why you’re located where you are, and my audience is super curious to talk with you. I’ve done a bunch on crowdfunding and I haven’t actually talked with somebody who’s, I guess, you might not want me to classify you this way, and we have plenty of time to correct it, but more on the traditional side of funding for entrepreneurs. So take it away. Tell us about your background and your company.

Ben Rifkin: Sure. So, see, where to start? So my background–I’ve been a lot–I was, previously, an operator for most of my career. So now I kind of have more of a finance type of job. But most of my career, I’ve been running a few different companies. I kind of rose up through the ranks of Ski and Skiing magazines from an intern right out of college, all the way up to being the publisher of Ski and Skiing, and then overseeing a bunch of the sales for [inaudible] and NASTAR as well.

Kristin Carpenter-Ogden: And what is the year span for that?

Ben Rifkin: Sure. So [inaudible] I interned in 2000 and then I came on full-time pretty soon after that for about a year and a half and then I left and did PR for Jackson Hole Mountain Resort for a couple of years, for 2 years. And then I moved to Vail with my wife, and did PR for Pat Peeples at Peeples [inaudible].

Kristin Carpenter-Ogden: I totally know Pat. She’s awesome.

Ben Rifkin: Yeah.

Kristin Carpenter-Ogden: [inaudible], actually.

Ben Rifkin: She is. Yeah. Got to work on a lot of really fun clients. I think, like you, she just has a great rapport in the industry and was fortunate to work with some really fun clients. And then I got recruited to come back to Ski and Skiing on the sales side, and really, to kind of create and grow the digital sales business. So that was 2005. So still early on in average sales. Yeah. And we were selling, but I think they were doing about $100,000 a year in advertising revenue online. And within a couple of years, that got enough to $1M and really started to push closer to $2M. And then I sort of got dragged into the print side of things which I didn’t necessarily want to, but what’s best for the company is sometimes the direction you head. And then from there, just sort of got promoted into more of the leadership type roles, and then eventually was running that group in Boulder which was a lot of fun.

Kristin Carpenter-Ogden: Well, that’s–yeah. Talk about a small world. So how did you make the leap to doing what you’re doing in Royal Street Investment and Innovation Center where you were [inaudible]?

Ben Rifkin: Sure. Yeah.So I made a couple baby steps from there. When I was the publisher of Ski and Skiing, there was a lot that I really enjoyed but there are few things that I wasn’t that interested in. And I wanted to work in this scenario where I could invest more in the companies. Ski and Skiing still largely is very much based on the print revenue side of things, and digital really is where things have been for a while. And so I moved over to a private equity group in Denver called Consumer Capital Partners which had incubated and owns the majority of Smash Burger. And while I was there, spun out the US Pro Cycling Challenge. So international cycling–road cycling stage race top tier…

Kristin Carpenter-Ogden: In Colorado.

Ben Rifkin: In Colorado. Right. So [inaudible] Evans, Tom Danielson–

Kristin Carpenter-Ogden: Oh, I remember. I think I actually [inaudible] down here. I know I met you when we were probably at Ski and Skiing along the years, too. But I met you down here in Durango because that was really the coolest day in the history of this town. It truly was.

Ben Rifkin: It was amazing. It was awesome.

Kristin Carpenter-Ogden: Yeah.

Ben Rifkin: I was blown away. I didn’t come from an events background and so it was phenomenal to be part of something like that. And just see a community come together also, just speaking about Durango. And then, you know what? From there to [inaudible], and then bounced around the state and ended up in Denver–really, really cool experience. And so that was sort of more moving toward finance even though that was really, a largely operating the company still. And then I kind of made a left turn. I was recruited to go be the president general manager of a minor league hockey team in Denver.

Kristin Carpenter-Ogden: Awesome. I love it.

Ben Rifkin: [inaudible]. It was a startup. So I’ve been there, wondering how to allocate resources and putting on the mascot uniform and sweating while doing trick or treating walks in the local neighborhoods in Denver and try to razzle a little momentum for the team.

Kristin Carpenter-Ogden: So wait, you’re not kidding?

Ben Rifkin: Not kidding at all.

Kristin Carpenter-Ogden: Okay.So you took your PR background, your marketing background, and you literally had to put on a mascot. I mean, talk about you so can relate with my dear audience. We have [inaudible] every kind of hat.

Ben Rifkin: Absolutely.Got to wear every hat, even the really smelly, sweaty, multiple [inaudible] ones that you try to avoid at all costs. Yeah, absolutely. That was really an all-hands on deck sort of business, being in the front office of a minor league sports team in a town as competitive as Denver for that sort of entertainment and discretionary dollar. Really, really fun. Incredibly difficult. The hardest, most humbling time I’ve had in my entire career by far. And I was fortunate enough as the team was starting to wind down. It’s actually no longer in existence in the league, actually, folded as well. But got recruited to come work in a family office here in Park City. The family office is called Royal Street Corporation, and it’s the family that founded and owns the majority of Deer Valley Resort, and now Solitude Resort. Has had a bunch of other holdings over the years. Definitely an entrepreneurial family likes to start things, likes to grow them. And then their core practices are really around retention and training and promotion of staff and employees. And then obviously, guest service customer. And then sort of doing what’s right for the company.

And then about 5 years ago, they made the decision that they wanted to get back into direct investing in other companies in a more formalized way, and sort of leverage those experiences or employ those experiences and pillars in early stage companies thinking that if we could instill those pillars early, the companies would have a great foundation to grow, and could do [inaudible] sustainably, profitably, and hopefully, attract follow-on from larger investors down the road.

Kristin Carpenter-Ogden: So it’s like a little bit of an incubation, focus on retention training promotion of staff. These things that really stand out to that family, right, they’re trying to bring now to start-ups or mid-stage companies or maybe both.

Ben Rifkin: Yeah. Mostly early stage. I mean, we start–so we work typically now. So I’m talking about Royal Street Investment and Innovation Center. And then we spun out another entity called Royal Street Ventures which is more of an independent, traditional fund, early stage venture capital fund. And so with both of those entities, we’re typically the first organized money into a company. After the friends and family around, usually, after an angel investor around. And then we’ll come in as there’s some proof of concept, hopefully, a little bit of product market fit, hopefully a little bit of revenue, and then we help to sort of stabilize that and grow it as quickly as possible and as sustainably as possible.

Profitability is definitely a part of our investment thesis as do we know what the business model of the company is, do we understand it, can we help them grow it and expedite it and hire to facilitate those things so that they become attracted to the next stage of investor? And we believe that companies that are looking toward profitability in the near future have a much better shot of a raising more capitals–sort of on their own terms, they’re empowered because they can sort of make their own choice on which investors to work with and how that funding comes in. And then they’re also able to weather the storm. And really, as a company, make their own choices.

When you’re profitable, you have a lot more options than you do when you’re not profitable. When you’re not profitable–Ubers and Air BnB’s and big companies like that, you always have to add fuel to the fire. And that’s why those companies are taking on so much more venture capital money. They’re not sustainable businesses yet. So we may sacrifice some of those long term returns that we might not have a thousand ex return [inaudible] portfolio. But hopefully, we’ll have a lot more, 2 to 6 times returns on capital than we will zeros.

Kristin Carpenter-Ogden: Right. Can you name–I don’t know if you’re allowed to, but can you name a couple of the brands that you guys work with?

Ben Rifkin: Yeah, absolutely. So most of our portfolios, it’s kind of general technology companies, health technology, and financial technology, and a few other sort of segments. We do have several that are in the outdoor industry–Club Ride Apparel, it is a lifestyle and–mountain bike-inspired lifestyle brand. It’s based in Ketchum, Idaho. We work very closely with those guys–with my [inaudible] and his team. [inaudible] will be at OR next week so I’m excited to see them there. We have a couple food companies that are definitely outdoor-inspired brands. Allgood Provisions as a dry snack fruits company, and they’re based in Park City. And then our brand, it’s based in Denver called the MM Local Foods. They’re sort of peripheral outdoor, they’re not gear, obviously, they’re food. But a lot of the same things going to that in terms of distribution and marketing and scaling.

Kristin Carpenter-Ogden: [inaudible] consumer profile. I’ve always thought looking across our markets at Verde, for example–they have these different trade halls and they feel like all these industries are so different, but the consumer profile is super similar.

Ben Rifkin: Yep, yep. Absolutely.

Kristin Carpenter-Ogden: So that makes a lot of sense, I think.

Ben Rifkin: Yeah.

Kristin Carpenter-Ogden: Well, that’s exciting. And I was–I feel really fortunate to have you on to share you with my audience today because again, as I referenced before, I’ve talked a lot about the changes in the sharing economy, crowdfunding, etc. How’s that affecting what you do on the more traditional side?

Ben Rifkin: I think the biggest change is it allows companies to get further along before they seek the kind of money that I have. And when I say that, venture capital money is the most expensive money a company can take. Because you’re giving up pieces of your company. You’re giving up equity, right? So as your company grows and you continue to take on more venture capital money, everytime you take more money on, you’re giving away pieces of your company. And so now, there’s so much access to capital in non-traditional hallways, crowdfunding, especially.

Especially as a consumer product, you can really do a lot of testing, a lot of validation, and have a lot of growth before you determine: is venture capital the way you want to go? There’s lots of other ways to go. Venture capital is certainly not for every company. But for ones that want to grow very, very quickly, then it’s a great pathway and can certainly be very lucrative for the entrepreneur. That’s definitely part of our thesis as well. We’re in it for the win-win. We want our entrepreneurs to do well. And hopefully, we will do well by them as well.

Kristin Carpenter-Ogden: So have these platforms enabled you to procure different types of companies or more of a specific industry? How are you using these platforms to maybe look for new brands to invest in?

Ben Rifkin: They’re successful campaigns, on things like Kickstarter, especially, or on the equity side that circle up and does a lot of consumer products. They’re good–for us, they’re good proof points, good validation points. Especially Kickstarter. A company that has a successful Kickstarter campaign. And then not just through the fundraising on Kickstarter, but then the ability to deliver the product on time and on budget. If they can come to us with those indicators, then we take a good, hard look. One of the things we’ve learned in consumer products–cross apparel and food and beverage is there’s kind of two pathways to growth.

One is you just pour a lot of money and then get your distribution up as quickly as possible and kind of not worry at all about the bottom line. It’s really risky because then you’re in a situation where you always have to find more capital to fuel your growth and fuel your operating loss. So we oftentimes look more towards companies that have sort of an established track record, they have growth, they’ve been able to build a real business, they’re hedging toward profitability, and some capital is really going to help them grow and open up new channels much faster.

Kristin Carpenter-Ogden: Right. That’s really, really interesting right there. So basically, would you say that that pour money in and get your distribution up is almost more of like an old playbook in your world but you now have ways to maybe take a more thoughtful approach to that, and it’s not so much like winning a race in a matter of time, It’s more doing it quality over–you know what I mean?

Ben Rifkin: Yeah. I think it’s partly that and partly that now more than ever, there are so many more ways to reach the end consumer. I think before the Internet, before social media, before selling through social media, on Kickstarter, and everything out there, your only choice as a brand was to go through retail. And you couldn’t test your products. You could do it very, very locally. So if you were–let’s take a local park [inaudible] brand–if you were Soul Poles, if you were Bryon Friedman, and you wanted to create a bamboo ski pole brand–you might buy a stock of bamboo and you might see if you could sell them in Park City, and out of the back of your truck. That went well, you might buy a little bit more. Then you might sell it in Park City again, you might go down to Salt Lake and see if you could sell it there.

Take a long time for you to build up that direct to consumer channel and be able to scale it before you went out to sell through retailers. But now, to me, the direct to consumer channel is a must-have for so many reasons. I mean, it’s the most profitable channel a company can have because there’s no [inaudible] there so you’re not giving up any margin. You get instant feedback on new products, products that are out there for a while. You get to know your customers really well. You have that opportunity. Whereas if you’re always working through a retailer, you’re kind of trusting them to give you feedback from their consumers a lot of the time. Even if you’re very proactive and sort of encouraging feedback through social media or through your own website. If you don’t own your consumers or your customers at the beginning, I think it’s really hard to try to call them back later.

Kristin Carpenter-Ogden: You know what? You just reminded me of the publishing world a little bit since we both have such a long history. A long and colorful history in there. It seems today, if you choose to write a book and you want to get it published traditionally, you actually have to show up with an audience built and say, “Here’s my list and this is how we’re going to get in front of the list.” And there’s a whole campaign that goes around launching the book that you have to actually have your own audience for. Is that the same in terms of–if say a new brand comes to you and they have 60,000 followers on Instagram and a really nice-sized e-mail list and they’re doing a good job with a bunch of different points of entry, is it sort of like–would that put them more on the top of the list in your mind?

Ben Rifkin: It definitely would. We put a lot of value on the founders. They’re the ones who are running the company, they’re the ones who are going to make the changes and see it through times, and it’s gotten them to where they are. So I think it’s a point that feeds into how good is this CEO, this entrepreneur, how much do they know about their customers, how many different opportunities do they have to bring those customers in, and then do they or are they paying attention to the metrics, the underlying metrics with those customers in terms of acquisition cause and conversion percentages, do they know how that differs by channel, by day of the week.

But the more data that an early stage company can kind of gather, the more that they can test their hypothesis about how to reach consumers, how to sell product. And then that, for us, helps to de-risk an investment and lets us know that this company is a little bit further along. If they can come back with some proof points, we know what happens in this channel, we know how to grow it. It’s going to take this much capital which will buy us this many customers from there, then here’s the next stepping stone.

Kristin Carpenter-Ogden: That must be fascinating.

Ben Rifkin: It is. What I love about what I do is that it sort of–it requires every fiber of operating experience that I’ve built in my career than being able to be nimble with it and employ it across every industry imaginable to sort of understand that the majority of businesses all work the same way. No matter if you’re B to C or B to B, you have a product, you’re constantly refining it, you’re gathering customers, you’re trying to be more efficient at converting those prospects and weave into customers. And then you work on retaining them. So those things don’t change, really. No matter what the industry is, no matter what the product is, that’s what we do as companies and as consumers. And so I get to look at a lot of different companies and a lot of industries and kind of see–hey, this company is doing these things well in the outdoor space that this other company that we have in our portfolio did really well in the help technology space. I can see where their next 6, 12, 18 months might go because we’ve gathered this experience before.

Kristin Carpenter-Ogden: That’s really cool. I’d like to say that we have that at Verde, but to be honest, it’s been tough just because of the changes in the market that they’re going through with retail. So for example, I love the concept of having a client in bike interface with our big watersports client because there are actually–some of our conglomerate brands are starting to do things that are similar or maybe one’s going to try one that the other one hasn’t done yet, right, or has done. But at the same time, they’re so short-staffed and they’re so–it’s just tough. Like the [inaudible] of business–and I’ve just never seen anything like this before in terms of people just discovering the right way forward for their brand.

Ben Rifkin: Yep.I think that’s true. At the same time, the community that you’re building with Intrepid Entrepreneur, I think, is ideal for helping entrepreneurs be nimble and be proactive and leverage other people’s experience with Royal Street Investment and Innovation Center and Royal Street Ventures. We started three years ago, I believe, an annual CEO summit for all of our portfolio CEOs. And the time that they spent together–we’ve tried to program it with [inaudible], with a panel discussion. And the time that they consistently say the most valuable is the time that they just talk to each other. So now we’ve started to kind of have a much more informal format where we’re–we just start the conversation then we let them go from there.

And really, the–trading their experiences across different industries and across different stages is by far the most impactful on their businesses. And I think that’s what you’re trying to build with Intrepid Entrepreneur. It’s a community of entrepreneurs that can reach out to one other and understand who has gone through similar scenarios and what choices they made and how they might do them differently, and hopefully, help entrepreneurs get to market faster and more sustainably and efficiently than they might otherwise be able to.

Kristin Carpenter-Ogden: Right.And everybody who reads my content of late knows that you have been assigned as my mentor for the OIWC PitchFest where I’ll actually be presenting the Intrepid Entrepreneur to the industry next week. And yes I’m kind of shaking as I say that. But first, I want to say thank you so much for your time and your help. And after hearing kind of your [inaudible] and credibility here and just looking at the fact that I’m doing this, basically, with a–it’s my side hustle. It’s my passion. I feel like I give back to the industry but also create something I really needed. And I know a lot of these brand and businesses need that are entrepreneurial. So I just have to ask, what has this been like for you? I don’t know, did you guys pick a name or do you know why you were assigned to me? I’m just curious, for us to [inaudible].

Ben Rifkin: I was definitely assigned to you.

Kristin Carpenter-Ogden: Okay.

Ben Rifkin: Not entirely sure what that process is. Oh, Kristin, can you hear that lawnmower in the background? We may have to switch channels or something. So I was assigned to you. I think it probably has to do with overlap in our backgrounds, right? In publishing and PR, and maybe personality types that we could get along pretty well and have a good rapport quickly. I try to give very candid feedback, and I think that you are an exceptional sort of listener and I think that’s probably why you’ve done well in Verde and your other businesses. You take time to listen to your clients. And so I think when we’ve had the conversations and I’ve been able to give you feedback, you deliberate on it. It’s not like you just take it point blank and throw it into your deck or your business model or anything like that. You definitely consider it. But I think you do listen and incorporate feedback as it makes sense. And I think that’s incredibly valuable as an entrepreneur.

Kristin Carpenter-Ogden: Well, I really appreciate that. And it’s the thing that I thought could be really useful for my audience. Yes, I mean, with Verde and even as a journalist prior to that, I was used to pitching. Pitching to get articles, like, get all of that. But then with Verde, we pitch all the time. It’s new business pitches, etc. I love that, but this is a whole different beast. It really is. I mean, we have 5 minutes. I think the first time we rehearsed, that was at almost 10 minutes. I had to cut my presentation in half, and frankly, it has been a hustle. Like, just trying to get everything together as we’re getting ready for our tradeshow, and here’s all kinds of stuff going on.

So the experience has been absolutely invaluable, but I went through–just last week, I was able to go through a peer feedback process through the OIWC. By the way, they’ve done an incredible job. With this, I’m so impressed and I can’t wait to support it in the future in any way they need me to. And I just really think what they’re doing is fantastic. So shoutout to OIWC and REI for helping make this happen. But also just the feedback that I read, and I was really proud of myself because sometimes, I don’t like to take negative feedback. There were some positive but there were some definitely, like, make sure you have a work on this, make sure [inaudible] did, like–it was great. And I did spend the weekend tweaking it. And I feel a lot more confident about it.

Also, just hearing them pitch was very, very helpful. I think there were 4 other people, women, on the call with me last week and we all listened to each other’s pitches, gave feedback. And that was a big turning point for me. And now I’m just heavy into rehearsal. Like the dog, my other–my kids’ friend, my husband, you name it, I’ve been rehearsing and I’m still not quite–being in PR, you get this. We are verbose to the point of a handicap sometimes, right? And it’s hard not to be able to tell a story. How do you tell a story in 5 minutes and get all the other stuff you have to deliver across? It’s not easy. There’s, like, an art to this, for sure.

Ben Rifkin: Yeah.And you know what’s interesting, too? I see a lot of pitch events. And as we’re coaching the entrepreneurs in our portfolio around creating decks for investment–the purpose of the deck in that initial presentation is sparking off an interest and confidence on what you’re doing to have a second meeting. That’s really what you’re trying to do. But a pitch event is a little bit different. You’re not trying to get a second meeting, you’re just trying to kind of impress the judges with what you have and where you’re going with it so that you win. So it’s a little bit different spin on it.

Kristin Carpenter-Ogden: And there actually isn’t a winner. And Erin will tell you. I know last year there was, and plus, it’s just like a bike tour, right? I mean, it’s a race. Let’s not, [inaudible], like, we’re there to win. Even though there isn’t a winner, we’re all still gunning for it.

Ben Rifkin: Right. You guys have the gran fondo rider that are juicing on the side.

Kristin Carpenter-Ogden: Right. Gosh, it sounds like you have some familiarity with that demographic.

Ben Rifkin: I’ve seen one or two.

Kristin Carpenter-Ogden: Yes, I bet.So why did you, as the president of Royal Street Investment and Innovation Center, why did you choose to allocate your time to the OIWC pitch fest?

Ben Rifkin: Sure. We really have sort of a give first mentality. As we’re making investments, we’re looking to extract some value out of this entrepreneurial ecosystem. And so we feel that for us to be able to do that, we really need to be giving first–giving our time, giving not necessarily money, but time, certainly, and experience. Because that’s a big part of it. And then going back to where you started with Park City as sort of a new hub or an evolving hub of innovation and entrepreneurial activity, I think it’s important that we get involved here, locally, and in Utah, Park City, and Salt Lake, and wherever we are making investments. But Park City has a lot going on right now.

There’s a couple of co-working centers and an incubator, and there’s a couple different capital groups here, the Park City angels are actually the most active [inaudible] in all of Utah, even besides our fund and other funds like ours. Some great entrepreneurs here, I think. Proximity to the airport and the outdoors is pretty much unmatched. Certainly not like this in Colorado. I think only maybe Reno, is the only place that has sort of a similar set-up as we do here. And so I think it’s encouraged a lot of really talented entrepreneurs to come and sort of try to go out on their own.

Kristin Carpenter-Ogden: I mean, for my people, it’s your snow, it’s the trails, like, it’s heaven. I mean, I think some of the trails I’ve ridden there, I’d like to have my ashes scattered on.

Ben Rifkin: There’s some beautiful riding here, for sure.

Kristin Carpenter-Ogden: It’s incredible. You guys must be so excited. So tell me the–I know we need to kind of wrap up here but–this is a really, I think I can get you to nail something here that’s tough to put into words that my audience might really appreciate. Can you articulate the difference you see working with say a tech or a health tech company versus a club rider versus one of us, a small, fledgling, like, gritty upstart in outdoor, bike, snow, or endurance?

Ben Rifkin: Yeah. So I think differences are really an outcome. What is the company going to grow up to be? I think if you start there–when I’m attacking a problem, I always–sometimes, you’re attacking it and approaching it, just trying to understand the problem a little bit more. But a lot of times you have an outcome in mind that you’re hoping to achieve, and if, I think, if you started the outcome and then start to work backgrounds and see what are the appropriate steps [inaudible] to reach it, certain things become clear. So in some of these tech companies, not all of them, but some of them, their goal is to grow as quickly as possible and then get acquired.

And I think that there are many more suitors in technology for acquisition of those companies than there are in outdoor. And so, I think, outdoor is that much more competitive. It’s more competitive for the consumers, and it’s certainly more competitive for the acquisitions. And so if that’s the case and your goal is still to be acquired, you’re kind of faced with–well, can you find a venture capital group that’s willing to place a bet in an industry that is smaller and has fewer acquisitions than these other industries? And if you can check some boxes and find the right investors who want to help you grow and have experience there, then I think you have a shot. But it’s a hard road.

And the demands on growth really stress the business in ways that striving for more “lifestyle business” which really means not venture backed, profitable, returning money to the owners or the shareholders, that’s a lifestyle business. Which could be software, could be outdoor goods. But those types of businesses are great businesses, there’s a lot of satisfaction. You can grow it as big as you want, but it may not be right for venture capital and for acquisition. So I think some of it starting there. And what do we want to do? If we’re just going to grow the company, are we attractive to investors, are we going to be attractive to acquirers? What do we have to achieve to be acquired? Whose radars do we need to be on? You should be able to name those companies before you even go out and look for money.

Kristin Carpenter-Ogden: That’s great advice.

Ben Rifkin: But it’s a hard thing. As an entrepreneur, especially with what happens in the news and tech IPOs and Silicon Valley on HBO, things like that–that lure of just quick venture money, explosive growth acquisition or IPO, that’s–you know [inaudible] better than me, Kristin. How many businesses restarted every month in the US right now and then how many fail? It’s mind-boggling.

Kristin Carpenter-Ogden: It is.I think the stat that I had in my deck was from November 2015, but it was hundreds, if not, close to thousands are started, and then 9 out of 10 failed. So that’s like 1 out of 10 make it in. And it’s interesting, like you said, if you’re looking out, what is it going to grow up to be? And a lot of people who follow Intrepid are in it to win it. They aren’t in it for the flip. And I feel like that makes some of the broad market trainings and books and mentorship not even applicable to us. Because it’s not like we want to go out and flip what we’re doing in three years.

We want to actually create something that has longevity and that we can own and get back with, and it suits our passion, right? So that, to me, feels like one of the crosshairs for me is, like, okay, we have to actually make this outdoors market-fluent, otherwise it’s–you could really take advice and put the company–the outcome might not be that one you want, if you’re following the advice of the broad market entrepreneur community.

Ben Rifkin: Yeah. And I think a lot of it is kind of aligning your expectations with what are realistic outcomes. Every company is not $100M company. You might have an extremely profitable $10 million company that ends up being more valuable than a company doing $100M in revenue and loses money.

Kristin Carpenter-Ogden: Right, for sure. And it’s a flash in the pan. Well, these are very interesting times, Mr. Ben Rifkin. Your job is probably not the same on a weekly basis, I would imagine.

Ben Rifkin: It is not. There are always new challenges and new companies to look at. And it’s hard–I kind of faced this when I was at Ski and Skiing–the ad technology world and the marketing worlds are changing so quickly. New technology. Facebook wasn’t there when I started, and then all of a sudden, Facebook was the #1 recipient of advertising dollars in the world. I think they beat out Google now. So those things change quickly so you have to stay on top of trends and new technologies, and understand who’s doing well and why, the underlying mechanics, and hope to apply those in businesses within a portfolio.

Kristin Carpenter-Ogden: Before I let you go, I know this is a question that my audience would want to know. So you obviously attend all of the major tradeshows in our market. So SIA, Interbike–I’m assuming, possibly, even the European shows, but definitely outdoor retailer–and we’re about to go in to outdoor retailer. Do you actually go there and shop, or how do you get a line of sight on on prospects? Is there a place you look, a network you tap into?

Ben Rifkin: I would say the biggest network that we worked with is our own existing portfolio company. So when one of our entrepreneurs that we’ve invested in recommends another entrepreneur or company for me to take a look at, I place tremendous weight on that. Probably more so than most of the other relationships that I have. I’m not trying to offend anyone who sends me leads right now because there are great deals that come through, but one of our entrepreneurs who works with us closely says, “Hey, you guys both do the other entrepreneur and do us. You guys need to meet each other. I think there’s something there.” We really listen to that.

Outside of that, certainly from the trade shows, from a lot of service providers, I work closely with some attorneys and some sort of outsource CFO groups. There’s one in Salt Lake that is a–does a fantastic job called Advanced CFO. So I look at a lot of companies that they work with, and then banks. Silicon Valley Bank is a big supporter of early stage companies and venture firms and such. And so they have a lot of deals as well.

Kristin Carpenter-Ogden: And do you pay attention to PR? Because that’s something that we have heard for a couple of our clients in Verde, they have said that our work has helped them line up deals.

Ben Rifkin: Yeah. Probably at a later stage, but the stage that we come in at, you have to take–and I’m not looking to offend you with this, Kristin.

Kristin Carpenter-Ogden: No, it’s okay. I can always erase this part.

Ben Rifkin: You have to take the PR with a grain of salt. The companies that we’re investing in are very early-staged, and so they might have a new product that came out that does something wonderful. But did it just come out, and it’s new? Or is it really kind of life-changing? I think some of the later stage companies, certainly, when they are doing product launches in there, doing $10,000M, $20,000M, $50,000M, $100,000M in revenue as a company, I would definitely think the PR plays into investors reaching out and saying, “Hey, I saw this. Would love to talk to you some time.” But we’re still kind of in that early discovery phase so I think there’s–and the other pieces–most of the companies that we’re working with don’t necessarily have a PR firm yet. They’re not quite there.

Kristin Carpenter-Ogden: Right. Well, I have a DIY solution for them.

Ben Rifkin: Perfect.

Kristin Carpenter-Ogden: Send them my way. But seriously, Ben, I really appreciate all of your mentorship, and I’m also just really stoked to have you in my professional network in my life. Now this has been very fun and I kind of feel like we’ve gone to a little war here together. We’re bonded. So thank you, and I look forward to serving any way I can, making Royal Street awesome going forward, and I love how you’ve brought such a diverse career path to this job and how you said you’re using every single part of it every single day for different companies. It’s just awesome to hear that and very inspiring. So just thank you so much. This insight is wonderful.

Ben Rifkin: You’re so welcome. Thank you.

Kristin Carpenter-Ogden: And I look forward to having you back. I will be updating everybody in terms of how the pitch goes, and maybe we can do a little decompress after for everybody, too.

Ben Rifkin: Cool. I have to share one quick story. So last week I was on vacation, I was back visiting my family in Maine, and I went to a baseball game, minor league baseball game, in Maine on night. And I took an Uber and just was talking to the driver briefly. She asked where we were from, and I was with my brother-in-law and he was just moving to Maine from Boston. And I said I was from Park City, Utah. And she said, “Oh, I’m going to be in Utah in a couple of weeks.” And I said, “Oh, what are you doing in Utah?” And she said, “Oh, I’m going to be there for outdoor retailer.” And it was really cool. So the Uber driver has a social media marketing firm focused on outdoor, comes to outdoor retailer every year, both times. And I asked her if she was involved in OIWC, she said she was a member, and she is launching a new business and hoping to apply for pitch fest next year.

Kristin Carpenter-Ogden: That’s such a small world.

Ben Rifkin: It was really cool. Yeah, it was amazing. It was awesome.

Kristin Carpenter-Ogden: Well, this program has legs, and I know it’s going to go places, it’s going to serve a ton of people, and I think it’s close to both of our hearts in terms of getting that stupid ratio–9 out of 10 businesses fail. We’re going to just crush that, okay, in OIWC.

Ben Rifkin: We’ll be an outlier [inaudible] industry.

Kristin Carpenter-Ogden: Yes, we will. So that’s wonderful. I’m glad that you shared that. And thank you so much, I look forward to having you back on the show. Probably after the show sometime in September.